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Sixty-nine public colleges and universities enroll 29 percent or fewer Pell Grant recipients and charge the lowest-income, in-state freshmen an average net price under $10,000.

Source: The above data are from the Department of Education. This is only a selection of schools in the category.

This group includes some of the most elite public universities in the country, including 19 public flagship universities.¹ Like their prestigious private college counterparts, these schools tend to offer generous amounts of need-based aid. Yet, compared with other public colleges and universities, these institutions enroll only a small share of low-income students. The schools tend to overwhelmingly serve the well-to-do.

Take the College of William & Mary. In 2015–16, our data show that William & Mary was the least socioeconomically diverse public college in the country, with only 11 percent of its students receiving Pell Grants.

Data from the Equality of Opportunity Project show that, for the Class of 2013, nearly three-quarters of traditionally aged students at the school came from families in the top 20 percent of the income scale. The average family income of students that year was $270,577 and the median was $176,400, the highest amount of any public university.²

More than half of the William & Mary students in that class (56 percent) came from families in the top 10 percent of the income scale (making $144,000 or more) and more than a third were from families in the top 5 percent (making at least $189,000). Over 6 percent came from families in the top 1 percent, making at least $631,000. Two other public universities on this list—the Universities of Michigan and Virginia—served even more 1-percenters than William & Mary.³

Although schools like William & Mary are bastions of privilege, they largely do right by the limited number of low-income students they enroll by devoting the lion’s share of their financial aid to the students who need it most. But as the “merit”-aid arms race sweeps through the public four-year university sector, some of these institutions are finding it harder and harder to do the right thing.

The University of Illinois (UI) at Urbana-Champaign, the state’s flagship campus, is a case in point. Although the school gives out some non-need-based aid, it continues to provide the bulk of its financial aid dollars to financially needy students.⁴ As a result, the university’s lowest-income, in-state students who started school in 2015–16 paid the relatively low average net price of $7,554.

The decision of the relatively high-priced school to stay committed to need-based aid has put the school at a major disadvantage.⁵ Other states’ public flagship and research universities have set up permanent shop in Illinois in order to lure high-achieving and wealthy students to their campuses by offering generous non-need-based scholarships that make going out of state more affordable than going to UI.⁶

These carpetbagger recruiters have been remarkably successful. Today, nearly half of all Illinois students leave the state to go to college. That’s up from less than one-third back in 2000.⁷ In 2016, the state suffered a net loss of more than 19,000 students. Only New Jersey experienced a bigger loss.⁸

As a result, UI has faced declining yields year after year, meaning that the school has had to accept ever-larger numbers of Illinois students to keep enrollment steady.⁹ University officials have no illusions about why so many top students are going elsewhere.

“We’re obviously concerned that lots of schools in competing states are trying to compete for Illinois students. We know that many times, they are trying to give them scholarships, grants, awards to make them [the out-of-state schools] seem on par with our costs,” Dan Mann, the university’s interim associate provost for enrollment management, told the student newspaper in April. “We have chosen here to provide most of our financial aid as need-based financial aid instead of merit-based.”¹⁰

The majority of top Illinois students who leave the state go to flagships in neighboring ones, such as the Universities of Iowa and Missouri. Since 2013, the University of Iowa has provided these students with $10,000 scholarships that lower their tuition to the amount that Iowa residents pay.¹¹ In 2017, Illinois students made up nearly 30 percent of Iowa’s freshmen class.¹²

While it’s not surprising that Illinois students would go to other Midwestern universities, a large number are going to more far-flung schools that have bid the highest for them.

One institution that has been extraordinarily successful in luring Illinois students is the University of Alabama, which has been the most aggressive public university in the merit-aid arms race.¹³ The university has at least 36 full-time admissions officers, armed with generous scholarships, spread throughout the country to attract top students from affluent families to the school.¹⁴

According to the Chicago Tribune, more than 1,600 Illinois students were part of the Crimson Tide last year, up from about 150 a decade ago.¹⁵ “And Alabama isn’t taking just any student; many are among Illinois’ brightest,” the newspaper reported. “More than 700 Illinoisans from 193 cities made the president’s and dean’s lists at Alabama, earning at least a 3.5 GPA for fall 2017. They are meeting one another in classes, clubs and sororities, and through campus group chats.”¹⁶

It’s no mystery why so many top Illinois students are coming to Tuscaloosa. At “Illinois colleges, the in-state tuition is so expensive,” Caroline Ward, who was one of 203 freshmen from the state who received full-tuition scholarships last year to attend the University of Alabama, told the Tribune in April. “Students are looking for those scholarships, and they’re going to take them wherever they could get them.”¹⁷

Several years ago, the University of Wisconsin at Madison, which is also on this list, faced the same type of pressure that Illinois’s flagship university is facing now. The school decided that it had no other choice but to join the fray and significantly boost its spending on non-need-based aid to stop institutions from other states from grabbing up the best Wisconsin students.¹⁸

“Students are looking for those scholarships, and they’re going to take them wherever they could get them.”

“It worries me a great deal, the type of merit aid I see being offered to top students from Wisconsin,” Rebecca Blank, chancellor of the University of Wisconsin at Madison, told Inside Higher Ed in 2015. “As far as I’m concerned—I’m an economist—that’s a real waste of where we should be spending our money in higher ed. But I’ve got to keep some of those top students in Wisconsin.¹⁹

“We’ve got to play in that game,” she added. “We just have to.”

The University of Illinois is feeling the heat, but hasn’t gone quite as far as the University of Wisconsin, which is also using non-need-based aid to pursue out-of-state students. Instead, this spring, the university persuaded the Illinois state legislature to create a new $25 million merit-based scholarship program for high-achieving students that the state’s public universities must match.²⁰ The recipients of the scholarships cannot, however, come from families who have annual income more than six times the national poverty rate, which is currently $25,100 for a family of four.²¹

Will this step do enough to stem the tide? Or will the University of Illinois feel the pressure to take more aggressive steps in the future? The answer to those questions could have a major impact on whether the school remains affordable and accessible for low-income students.